This continuation will discuss Africa’s cannabis market as one of the many other continents that more or less participate in the international market. Even if Africa is currently not generating as much cannabis value as other continents do, it still plays an incredibly significant role because of its unique position in the world, the eagerness and commitment to develop legal cannabis frameworks. Africa is also a great example to show how sharing costs can be an effective strategy and foster a sufficient cannabis market flow that is necessary to sustain in the long-term.
Africa
Africa consists of 54 countries. In contrast to the common perception that Africa is not developed or stable enough to even participate in the international cannabis market, the reality reveals quite the opposite: Africa is eager to become a “potential cannabis market leader”, but only needs more regulated frameworks which they are still developing. Interestingly, 32% of all the cannabis consumers in the world reside here, this makes 83 million per year who consume cannabis in Africa, according to a 2019 report (see below chart) from New Frontier Data, a global cannabis research data forum. Within the past year about 11.4% of Africans who are fifteen and above have used cannabis, this strikingly reflects double the 6% global annual amount for cannabis consumption. This high percentage in cannabis consumption has its cultural reasons. In Africa, cannabis has a history of being used for “medical, ritualistic and social purposes” and this reflects itself in the social tolerance of integrating it into their everyday lives. In addition, it becomes obvious that the largest cannabis market among the African countries (see below as well) are found in Nigeria, Ethiopia and Morocco (with high source for hashish), as the most-populated but also deem cannabis as illegal.
Path to Legalization
Lesotho was the first country in Africa to legalize medical cannabis in 2017 by providing medical cannabis licenses through the government first and then finalizing regulations for them a year later. Zimbabwe and South Africa followed soon after with legalizing both medical and recreational cannabis in 2018. Moreover, South Africa began to get rid of their laws that made cannabis use a criminal offense with the support of South Africa’s Constitutional Court. The first medical cultivation license in South Africa was not issued until 2019. In recent years, all of these three countries (Lesotho, Zimbabwe, South Africa) have been striving towards the establishment of legal cannabis frameworks that keep everything regulated, especially, in regards to “the cultivation, sale, transportation, manufacturing, processing and exportation of cannabis products”. In 2019, Swaziland and Uganda have become the new focus in the African cannabis industry. The reasons behind this are that Swaziland is trying to pass the law that will permit and control the industrial cannabis production so it can be used for the areas of medicine and cannabis research. Uganda is on the verge of change because it still has laws that criminalize and prohibit cannabis with a jailtime of five years, but is currently working on developing a legal framework for cannabis production and usage.
Cannabis Business Objective, Strategies & Challenges
The cannabis business objective in Africa is to minimize high costs for cultivating and producing cannabis as much as possible with “low-tech”operations. Meeting international standards of cannabis cultivation that relies on “innovative irrigation technologies” remains a hurdle but Africa’s century-long “agricultural expertise” with cannabis production combined with their “favorable climate” balances this out to an extent. One way to foster a flourishing cannabis market in Africa is by sharing the costs, as suggested by New Frontier Data and that can only be implemented if all of the countries in Africa who have legalized cannabis cooperate. By doing so, the continent’s dependency on NGO’s and charity organizations for financial and medical supplies will shift. Apart from that, issues would need to be addressed, such as those with cannabis businesses being formed by investors from abroad that are not approved by the government in that given country. This requires more tactfulness. “Establishing local partnership requirements for international owners or investors” and “the creation of cultivation cooperatives” are seen as alternatives to ensure a successful cannabis market on the local level that does not interfere with improving the areas of health, agriculture, trade and construction.
A Promising Future
According to The African Cannabis Report from Prohibition Partners in 2019, in particular, South Africa stands out among the countries in Africa because it has all the needed resources to turn into one of the major medicinal cannabis markets in Africa. Plus, it is here where people are more open-minded towards cannabis in general compared to the Northern part of Africa. In 2018, Africa had a cannabis market value of $37.3 billion, equivalent to 11% of the global value (see New Frontier Data 2019). Further estimations of Prohibition Partners show that by 2023 South Africa could reach USD 1.7 billion cannabis value. At the same time, if laws would be put in place to regulate the cannabis market more effectively, Africa’s legal cannabis market is estimated to have a value of USD 7.1 billion per year by 2023.
